If there is no one who is interested in borrowing from a bank:
a. the bank's excess reserves will be zero.
b. there will be no process of money creation.
c. the required reserve ratio must be equal to zero.
d. the required reserve ratio must be equal to 100 percent.
b
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In the above, as the y variable increases
A) the x variable is constant. B) the x variable increases. C) the x variable decreases. D) the x variable at first increases but then decreases.
One consequence of a negative externality is that
A. social costs are greater than private costs. B. private costs are greater than social costs. C. the marginal private cost curve slopes upward. D. the market output is less than the socially optimal output. E. a and c
Which of the following did NOT significantly exacerbate the banking crisis of the early 1930s?
A) the Fed's decision not to make loans to insolvent banks B) the large number of small, poorly diversified banks C) the large number of rural banks that held agricultural loans during a time of falling commodity prices D) the large amount of fraud carried out by bank managers
Demand pull inflation occurs when the:
A. price of a key input increases suddenly. B. price level changes in response to changes in the business cycle. C. price of necessity goods increases suddenly. D. business cycle becomes sporadic and unpredictable.